Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill

Commentary

Recommendation

The Health Committee has examined the Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill and recommends that it be passed with the amendments shown.

Introduction

This bill seeks to amend the Smoke-free Environments Act 1990, so as to give effect to the Government’s decision of 18 February 2013 to introduce a plain packaging regime for tobacco products in New Zealand. The principal objectives of introducing such a regime are to reduce the appeal of tobacco products and smoking, particularly for young people; to reduce the wider social acceptance and approval of smoking and tobacco products; to increase the noticeability and effectiveness of mandated health warning messages and images; and to reduce the likelihood of consumers acquiring false perceptions of the harms caused by tobacco products.

The bill would ensure that tobacco products were not manufactured, distributed, or sold unless they complied with the requirements set out in the legislation and regulations made pursuant to it. It would allow regulations to be made setting out the detailed requirements for the design and physical appearance of any packaging used or intended for use with tobacco products, and of the tobacco products themselves. It would amend existing regulation-making powers regarding health warnings on tobacco products to broaden their scope to include warnings of wider adverse social and economic effects, and also to allow positive health promotion messages.

The bill would create new offences with substantial penalties to deter effectively and punish any non-compliance (and would increase the penalties for existing offences regarding the advertising, promoting, or labelling of tobacco products to bring them into alignment with the penalties for the new offences).

The bill would not have any effect on intellectual property rights to register, own, and enforce trademarks and copyright in designs; it is only the use of trademarks and copyrighted designs as promotional devices on tobacco products and packaging that would be controlled.

This commentary covers the major amendments we recommend; it does not discuss minor, technical, or consequential amendments.

Additional information

Subsequent to concluding our hearings of evidence on the bill, we visited Australia as part of a committee exchange programme. Late in our visit, key findings on tobacco smoking in Australia from the National Drug Strategy Household Survey 2013 were released, including that daily smoking rates among people aged 14 and older have declined from 15.1 percent in 2010 to 12.8 percent in 2013, the lowest rate recorded to date. While this information is not directly relevant to any of the amendments we recommend, we consider it worth noting as it is at odds with earlier evidence received on smoking rates since the introduction of plain packaging in Australia. The Commonwealth Treasury has further advised that tobacco clearances (including excise and customs duty) fell by 3.4 percent in 2013 relative to 2012 when tobacco plain packaging was introduced. This information establishes a significant argument to support the legislation and negates many of the claims made by the tobacco industry.

Title of the bill

We recommend amending clauses 1 and 19, and clause 1 of the schedule, by replacing “(Tobacco Plain Packaging)” with “(Tobacco Standardised Packaging)” in the title of the legislation. While we acknowledge that the term “plain packaging” has been consistently used in the development of the policy and subsequent public consultation, we consider that the term “standardised packaging” would reflect more accurately the intended consequences of the bill.

We recommend amending clauses 6, 10, 14, 15, and 17 to ensure that “standardised” rather than “plain” would be used consistently in the enduring statutory language.

Purposes of the Act

We recommend amending clause 5 by replacing “to give up smoking” with “to quit smoking” and “have stopped smoking” with “have quit smoking”. This would bring the language used in the legislation in line with that in popular use, and by smoking cessation services such as Quitline.

Purpose of Part 2 of the Act

We recommend amending clause 6 to include the reduction of cultural, as well as social, acceptance and approval of smoking among the aims of introducing standardised packaging. An example of cultural approval of tobacco that could usefully be discouraged is its use in traditional gifting or trading.

We recommend amending clauses 11 and 12 to include cultural effects of smoking among the harmful effects to which health messages would be allowed to refer.

Restrictions on sale of small quantities

We recommend amending clauses 9 and 17 to retain in the principal Act the prescription of minimum quantities in which tobacco products may be sold. The bill as introduced would allow minimum quantities, of no less than the existing minimums, to be set by regulation, but would not require the making of regulations to implement the existing minimums.

We recommend amending clauses 13 and 15 to reflect in the offences provisions the changes to clauses 9 and 17.

Transitional provisions

We recommend amending clauses 3 and 4 of the schedule to ensure that, during the transitional periods of 6 weeks for distributors and of 12 weeks for other relevant persons, the provisions of either the current legislation or the amended legislation could be followed without risk of committing an offence under the other.

New Zealand First Party minority view

New Zealand First opposes the change that this bill makes.

We believe that there is insufficient data to show that standardised (plain) packaging is an effective measure by itself to reduce the incidence of smoking.

Data from across the industry in Australia shows that legal cigarette sales increased by 59 million cigarettes in the 12 months after standardised (plain) packaging was rolled out in December 2012. This apparent increase in consumption after the introduction of this legislation in 2012 is the first increase in the three years prior to this measure being introduced.

New Zealand First believes other measures to be more effective.

Appendix

Committee process

The Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill was referred to the committee on 11 February 2014. The closing date for submissions was 28 March 2014. We received and considered 15,682 submissions from interested groups and individuals. Of the total number of submissions received, 15,491 were in the nature of form submissions, with substantially replicated content. We heard oral evidence from 33 submitters, at hearings in Auckland and Wellington.

We received advice from the Ministry of Health. The Regulations Review Committee reported to the committee on the powers contained in clause 2.

Committee membership

Dr Paul Hutchison (Chairperson)

Shane Ardern

Paul Foster-Bell

Kevin Hague

Hon Annette King

Iain Lees-Galloway

Scott Simpson

Barbara Stewart

Poto Williams

Dr Jian Yang

Key to symbols used

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1 Title

2 Commencement

(1)This Act comes into force on a date appointed by the Governor-General by Order in Council.

(2)However, if this Act is not in force by the day that is 18 months after the date on which it receives the Royal assent, it comes into force on that day.

Part 1Amendments to Smoke-free Environments Act 1990

3 Principal Act

This Part amends the Smoke-free Environments Act 1990 (the principal Act).

4 Section 2 amended (Interpretation)

In section 2(1), insert in its appropriate alphabetical order:

“large retailer, in relation to a person that is alleged to have committed an offence in a certain accounting period, means a retailer whose total turnover in the prior accounting period exceeded $50 million (as accounting period and turnover are defined by section 2(1) of the Commerce Act 1986, except that in those definitions body corporate is to be read as any retailer)”.

5 Section 3A amended (Purposes of this Act)

(1)Replace section 3A(1)(b) with:

“(b)to regulate and control the marketing, advertising, and promotion of tobacco products (whether directly, including through the appearance of tobacco products and packages, or through the sponsoring of other products, services, or events) in order to improve public health by—

“(i)discouraging people from taking up smoking or using tobacco products; and

“(ii)encouraging people to give up quit smoking and to stop using tobacco products; and

“(iii)discouraging people who have stopped quit smoking, or who no longer use tobacco products, from resuming smoking or tobacco use; and

“(iv)reducing people's exposure to smoke from tobacco products; and”.

(2)Replace section 3A(1)(d) with:

“(d)to give effect to certain obligations and commitments that New Zealand has as a party to the WHO Framework Convention on Tobacco Control, done at Geneva on 21 May 2003.”

6 Section 21 amended (Purpose of this Part)

After section 21(a), insert:

“(aa)to require the standardised appearance of tobacco products and plain packages (including messages and information) for tobacco products in order to—

“(i)reduce the appeal of smoking and tobacco products, particularly for young people; and

“(ii)further reduce any social and cultural acceptance and approval of smoking and tobacco products; and

“(iii)make warning messages and images more noticeable and effective; and

“(iv)reduce the likelihood of consumers acquiring false perceptions about the harmful effects of tobacco products; and”.

7 Section 24 amended (Use of trade marks, etc, on goods other than tobacco products, or in relation to sponsored events)

(1)Before section 24(1), insert:

“(1AA)In this section, non-tobacco article means an article that is not—

“(a)a tobacco product; or

“(b)a package or container in which a tobacco product is sold or shipped.”

(2)Replace section 24(1)(a) with:

“(a)on any non-tobacco article; or”.

(3)Replace section 24(1)(b)(i) with:

“(i)any non-tobacco article; or”.

(4)Replace section 24(2)(a) with:

“(a)any non-tobacco article; or”.

(5)In section 24(3), replace “any article, other than a tobacco product or a package or container in which a tobacco product is sold or shipped,” with “any non-tobacco article”.

(1)Replace the heading to section 32 with “Messages and information required for tobacco products”.

(2)Replace section 32(1) with:

“(1)The package for a tobacco product must comply with the following requirements:

“(a)the package must display, in accordance with regulations under this Part, as many of the following things as the regulations require:

“(i)a message relating to—

“(A)the harmful health, social, cultural, or economic effects, or other harmful effects, of using the product:

“(B)the beneficial effects of stopping the use of the product or of not using the product:

“(ii)a list of the harmful constituents of the product:

“(iii)if the product is intended for smoking, a list of the harmful constituents, and their respective quantities, present in the smoke:

“(iv)whether as part of or in addition to any message about effects, a photograph or picture relating to—

“(A)the harmful health, social, cultural, or economic effects, or other harmful effects, of using the product:

“(B)the beneficial effects of stopping the use of the product or of not using the product; and

“(b)if required by the regulations, the package must contain a leaflet with—

“(i)information (prescribed by the regulations for tobacco products generally, or tobacco products of a class to which the product belongs) relating to—

“(A)the harmful health, social, cultural, or economic effects, or other harmful effects, of using the product:

“(B)the beneficial effects of stopping the use of the product or of not using the product; and

“(ii)if the product is intended for smoking, as much of the following information (stated, as the regulations may require, by reference to the class of tobacco product to which the product belongs, or to the product's brand as a tobacco product of any class or variant of a brand of a tobacco product of any class) as the regulations require:

“(A)a list of the harmful constituents, and their respective quantities, present in the product:

“(B)a list of the additives, and their respective quantities, present in the product:

“(C)a list of the harmful constituents, and their respective quantities, present in the smoke.”

(1)Replace paragraphs (a) and (b) in each of section 36(1), (2), (3), and (3A) with:

“(a)in the case of a manufacturer, an importer, or a distributor, to a fine not exceeding $600,000; or

“(b)in the case of a large retailer, to a fine not exceeding $200,000; or

“(c)in any other case, to a fine not exceeding $50,000.”

(2)Replace section 36(4) with:

“(4)Every manufacturer, importer, distributor, or retailer of tobacco products who distributes or supplies any tobacco product in contravention of section 28(1) commits an offence and is liable,—

“(a)in the case of a manufacturer, an importer, or a distributor, to a fine not exceeding $600,000; or

“(b)in the case of a large retailer, to a fine not exceeding $200,000; or

“(c)in any other case, to a fine not exceeding $50,000.”

(2A)Replace section 36(7A) with:

“(7A)Every person commits an offence and is liable to a fine not exceeding $2,000 who, being a manufacturer, importer, distributor, or retailer, sells or offers for sale any cigarettes or tobacco in contravention of section 30A(3).”

(3)Repeal section 36(7A) and (9).

14 New sections 36AA and 36AAB inserted

After section 36, insert:

“36AAOffence in respect of plain standardised packaging of tobacco products

“(1)This section applies to—

“(a)a person who manufactures, distributes, sells, offers for sale, or otherwise supplies a tobacco product knowing that the product contravenes section 31A(1); or

“(b)a person who distributes, sells, offers for sale, or otherwise supplies a tobacco product in a package knowing that the package contravenes section 31A(2); or

“(c)a person who does the following knowing that a package for a tobacco product contravenes section 31A(2):

“(i)manufactures, distributes, sells, offers for sale, or otherwise supplies the package; or

“(ii)packages, or arranges for the packaging of, a tobacco product in the package.

“(2)The person commits an offence and is liable on conviction,—

“(a)in the case of a manufacturer, an importer, or a distributor, to a fine not exceeding $600,000; or

“(b)in the case of a large retailer, to a fine not exceeding $200,000; or

“(c)in any other case, to a fine not exceeding $50,000.

“(3)However, the person does not commit an offence against this section in relation to a tobacco product or a package for a tobacco product if—

“(a)the product or package is intended for export; and

“(b)the product or package has not been sold or supplied at retail, or offered for retail sale, in New Zealand.

“(4)In proceedings for an offence against this section,—

“(a)the prosecutor need not assert in the charging document that the exception in subsection (3) does not apply; and

“(b)the burden of proving that the exception applies is on the defendant.

“36AABPresumption about large retailer

“(1)This section applies to proceedings for—

“(a)an offence against section 36 for which the maximum fine for a large retailer is separately specified:

“(b)an offence against section 36AA.

“(2)In proceedings for the offence, a defendant who is not a manufacturer, an importer, or a distributor is presumed to be a large retailer unless there is evidence to the contrary.

“(3)Evidence to the contrary must include financial statements of the defendant that are sufficient to determine whether the defendant is a large retailer.”

15 Section 38A amended (Infringement offences)

(1AA)In section 38A, definition of infringement offence, paragraph (j), replace “section 30A(2) or (3), both of which impose” with “section 30A(3), which imposes”.

“(1)The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:

“(a)prescribing for the purposes of section 31A(1)(a) requirements, or options permitted, for all or any aspects of the appearance of a tobacco product:

“(b)prescribing for the purposes of section 31A(1)(b)(ii) the quantity or quantities in which a tobacco product must be packaged:

“(c)prescribing for the purposes of section 32(1)—

“(i)the form, size, and content of messages and information to be displayed with, on, or in the package for a tobacco product:

“(ii)the photographs and pictures to be displayed as part of or in addition to messages about effects relating to a tobacco product:

“(iii)the circumstances and manner in which the messages, information, photographs, and pictures must be displayed:

“(d)prescribing for the purposes of section 31A(2)(b) requirements, or options permitted, for the display of the brand or company name on the package for a tobacco product, including the circumstances and manner in which the name is to be displayed:

“(e)prescribing for the purposes of section 31A(2)(c) requirements, or options permitted, for all or any other aspects of the appearance of the package for a tobacco product:

“(f)providing for any other related matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect.

“(2)Regulations under subsection (1)(a) or (e) may (without limitation) do all or any of the following:

“(a)require a tobacco product, or the package for a tobacco product, to be a prescribed size and shape:

“(b)prohibit a tobacco product, or the package for a tobacco product, from displaying any words or other marks unless they are permitted by section 31A(2)(b) or the regulations:

“(c)specify types of words or other marks that are permitted to be displayed on a tobacco product or the package for a tobacco product (for example, bar codes or marks used to record manufacturing information or to detect legitimate products or packages):

“(d)specify requirements for the display of the permitted words or marks, including the circumstances and manner in which the words or marks are to be displayed (for example, the typeface or font, size, colour, and position of the words or marks):

“(e)prohibit any type of feature from a tobacco product or the package for a tobacco product (for example, any feature designed to promote the product by changing the appearance of the product or package after retail sale or by making a noise or smell).

“(3)Regulations under subsection (1)(b)—

“(a)may, for example, prescribe the number of cigarettes or the weight of loose tobacco that must be contained in a package; but

“(b)must not permit packages of fewer than 20 cigarettes or of less than 30 grams of loose tobacco prescribe a quantity that does not comply with section 30A(3).

ScheduleTransitional provisions for certain amendments made on or after 1 January 2013

1Interpretation

2No transitional period for manufacturers, importers, or persons who package

To avoid doubt, there is no transitional period for a manufacturer or an importer or for a person who packages, or arranges for the packaging of, a tobacco product.

3Transitional period of 6 weeks for distributors

(1)This clause provides for how this Act, and any regulations made under this Act, apply in relation to a distributor during the period of 6 weeks starting at the commencement of the amendment Act.

(2)The Act and regulations apply as they existed immediately before the commencement of the amendment Act (as if they had not later been amended or replaced by the amendment Act or by any other enactment).

3Transitional period of 6 weeks for distributors

(1)Despite anything in this Act, a distributor does not commit an offence against this Act in the 6-week transitional period if the act that would have constituted the offence would not have been an offence against the Act as it was, and as the regulations made under it were, immediately before the commencement of the amendment Act.

(2)In this clause, 6-week transitional period means the period of 6 weeks starting at the commencement of the amendment Act.

4Transitional period of 12 weeks for other relevant persons

(1)This clause provides for how this Act, and any regulations made under this Act, apply in relation to any other relevant person during the period of 12 weeks starting at the commencement of the amendment Act.

(2)The Act and regulations apply as they existed immediately before the commencement of the amendment Act (as if they had not later been amended or replaced by the amendment Act or by any other enactment).

(3)In this clause, other relevant person—

(a)means a person who sells, offers for sale, or otherwise supplies a tobacco product or a package for a tobacco product; but

(b)does not include a manufacturer, an importer, a distributor, or a person who packages, or arranges for the packaging of, a tobacco product.

4Transitional period of 12 weeks for other relevant persons

(1)Despite anything in this Act, any other relevant person does not commit an offence against this Act in the 12-week transitional period if the act that would have constituted the offence would not have been an offence against the Act as it was, and as the regulations made under it were, immediately before the commencement of the amendment Act.

(2)In this clause,—

12-week transitional period means the period of 12 weeks starting at the commencement of the amendment Act

other relevant person—

(a)means a person who sells, offers for sale, or otherwise supplies a tobacco product or a package for a tobacco product; but

(b)does not include a manufacturer, an importer, a distributor, or a person who packages, or arranges for the packaging of, a tobacco product.